Eid expenses must be declared in tax returns

Many individuals spend a significant amount of money during Eid but fail to report these expenses in their tax filings. The National Board of Revenue (NBR) now insists that taxpayers accurately disclose such expenditures in their tax returns to prevent tax evasion and ensure a more transparent taxation system.

According to the NBR, taxpayers should provide precise details of all expenses, including Eid-related costs, when filing their tax returns. If any discrepancies are detected, they may be required to explain them.

To avoid such situations, individuals should include expenses related to Eid shopping, gifts, and travel in their tax records.

The authority has said that anyone with an annual taxable income exceeding Tk3.5 lakh must include Eid expenses in their statement of living costs.

Personal income tax filers must submit their IT-10B form, which includes details of their living expenses. Section 7 of this form specifically requires taxpayers to disclose festival-related expenditures.

Tax officials closely scrutinize expenses on shopping in luxury malls, Eid gifts, and travel.

Why Is declaring living expenses important?

The primary reason for requiring a declaration of living expenses in tax filings is to ensure that reported income aligns with actual expenditures.

In many cases, individuals declare lower incomes while maintaining an extravagant lifestyle. To address this discrepancy, the NBR mandates a detailed expense report.

Tax authorities pay particular attention to individuals who purchase expensive clothing, travel abroad, or spend large sums on Eid shopping.

Required information in the living expense statement

1. Household expenses – Monthly family expenses and sustenance costs
2. Housing costs – Rent, maintenance, and homeownership details
3. Transport costs – Fuel, driver’s salary, and vehicle maintenance
4. Utility bills – Electricity, gas, water, internet, and phone bills
5. Education costs – Expenses related to children's schooling
6. Travel expenses – Eid-related domestic or international travel costs
7. Festival expenses – Eid shopping and gift expenditures

Who must submit a wealth statement?

Individuals must declare their assets if they meet any of the following conditions:

1. Own assets worth over Tk50 lakh
2. Own a private vehicle
3. Own an apartment or house
4. Hold shares in a publicly listed company
5. Are a government employee

If any of these conditions apply, filing a wealth statement is mandatory.